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January 19, 2017 By Richard Bowen

Audit the Fed? Maybe this time it will happen.

Source: TonyTheTiger, CC BY-SA 3.0
Federal Reserve Building in Chicago. Source: TonyTheTiger, CC BY-SA 3.0

Senator Rand Paul and Representative Thomas Massie have re-introduced a bill in Congress to audit the Federal Reserve. The Federal Reserve Transparency Act of 2017 would require that the Government Accountability Office (GAO) “conduct a thorough audit of the Federal Reserve’s Board of Governors and reserve banks within one year of the bill’s passage.” 

Rep. Massie (R-KY) stated: “It is time to force the Federal Reserve to operate by the same standards of transparency and accountability to the taxpayers that we should demand of all government agencies.” “The American public deserves more insight into the practices of the Federal Reserve… Behind closed doors, the Fed crafts monetary policy that will continue to devalue our currency, slow economic growth, and make life harder for the poor and middle class.”  

Legislation to audit the Fed has met with mixed success since the 2008 economic crisis. The House passed similar measures in 2012, 2014 and 2016, all to be defeated in the Senate. The Government Accountability Office, however, did gain some limited oversight powers and performed a one-time audit pursuant to the 2010 Dodd-Frank financial reform act. That audit uncovered the $16 trillion in secret loans which were used to bail out US banks as well as foreign banks and businesses, but the GAO was prohibited from auditing the Fed’s monetary policy decisions.

Senator Paul’s measure would authorize the GAO to review more information as part of an audit, including their monetary policy decisions, and hopefully provide some accountability for their actions. The many proponents of the bill further argue that the Fed is too powerful and lacks sufficient oversight for its policy and interest rate decisions.

Critics of the bill warn that it will give lawmakers too much information and could subject the Fed to undue political pressure and discourage it from taking unpopular steps for the good of the overall economy. Needless to say the proposal was very vocally opposed by Federal Reserve Chairwoman Janet Yellen last year.

“To date no institution holds more power over the future of the American economy and the value of our savings than the Federal Reserve,” said Sen. Paul, “yet Fed Chair Yellen refuses to be fully accountable to the people’s representatives.” 

Senator Paul has a point. The Federal Reserve is an entity all to itself with unprecedented power. 

President-elect Donald Trump had also been a vocal supporter of auditing the Fed and even reining it in more broadly. When he was on the campaign trail, President-elect Trump blasted the central bank’s politically motivated manipulation of the U.S. economy and its artificially low-interest rates. He also denounced the “very false economy” propped up by Fed monetary gimmicks. “It is so important to audit The Federal Reserve,” Trump said, echoing comments made by his advisers and associates.

The Federal Reserve has enormous power over the U.S. economy and is supposedly designed to be independent of Congress and the President. And, because of that, it has been the target of suspicion and conspiracy theories since it was founded in 1913.

All the more reason we should audit the Federal Reserve and let the sunshine in.

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Tagged With: Federal Reserve

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Richard Bowen is widely known as the Citigroup whistleblower. As Business Chief Underwriter for Citigroup during the housing bubble financial crisis meltdown, he repeatedly warned Citi executive management and the board about fraudulent behavior within the organization. The company certified poor mortgages as quality mortgages and sold them to Fannie Mae, Freddie Mac and other investors.

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What People Are Saying About Richard M. Bowen

William D. Cohan"Richard Bowen is one of my heroes. His is a story of human fortitude at its best and Wall Street at its worst."

~ William D. Cohan, NY Times Best Selling Author
2017-06-30T10:08:59+00:00
"Richard Bowen is one of my heroes. His is a story of human fortitude at its best and Wall Street at its worst." ~ William D. Cohan, NY Times Best Selling Author
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"Richard's speech at the April Financial Executives International dinner was informative, interesting, riveting, and fast moving.  The feedback from members was overwhelming positive, and Richard received one of the few standing ovations given by our membership." ~ Jim Farrell, Program Chairman, Dallas Chapter, Financial Executives International
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Dennis McCuistion"Richard Bowen has been there, done that, and has the scars to prove it, and his message of corruption at the highest levels of industry and government needs to be heard. I only wish that more bankers had the courage that Bowen exhibits. He is not only one of the most talented bankers I have ever met, he has more integrity than all the bankers on Wall Street put together. If his former employer had listened to him taxpayers would not have had to bail out Citi for the third time in the last 30 years."

~ Dennis McCuistion, Host of the McCuistion TV program
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"Richard Bowen has been there, done that, and has the scars to prove it, and his message of corruption at the highest levels of industry and government needs to be heard. I only wish that more bankers had the courage that Bowen exhibits. He is not only one of the most talented bankers I have ever met, he has more integrity than all the bankers on Wall Street put together. If his former employer had listened to him taxpayers would not have had to bail out Citi for the third time in the last 30 years." ~ Dennis McCuistion, Host of the McCuistion TV program
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~ Betty Garrett, Garrett Speakers International
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"Richard Bowen is a dynamic, entertaining speaker and story-teller - a CPA with a great personality!" ~ Betty Garrett, Garrett Speakers International
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fred-timmons"I believe Richard Bowen is the only keynote speaker to ever receive a standing ovation from the Texas Society of CPA’s at any of its annual conferences."

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2014-12-28T19:47:22+00:00
"I believe Richard Bowen is the only keynote speaker to ever receive a standing ovation from the Texas Society of CPA’s at any of its annual conferences." ~ Fred Timmons, Chairman of The Texas Society of CPA's
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Presentation Topics

Playing for High Stakes: The Principles and Practice of Ethical Leadership

Dark Citi: The Story of a Whistleblower

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Now an ethical leadership speaker, Richard Bowen was Citigroup's Business Chief Underwriter during the housing bubble.

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